Prudential Standard GOI 2 (Governance of Insurers)

Question 1

the Prudential Authority’s minimum requirements for good governance of insurers include: (6)

Answer 1

• requirements for the composition and operation of boards of directors
• mandatory committees for audit, risk and remuneration
• roles and responsibilities of board members and senior management
• guidance on delegations of roles and functions on how these should be governed
• ongoing requirements for the operations of boards of directors, including succession planning, and evaluation of board performance and renewal
• ongoing requirements for the operation of senior management

Question 2

Part 1 of Chapter 5 of the Insurance Act, 2017

Principles of governance of insurers

Answer 2

• Insurers must adopt, implement and document an effective governance framework, that protects the interest of policyholders;
• The governance framework must be proportionate to the nature, scale and complexity of the insurance business and risks of the insurer;
• The governance framework must include effective systems of corporate governance, risk management and internal controls.

Question 3

2 Critical ingredients of effective board decision making

Answer 3

• independence

- capacity

Question 4

The board of directors of an insurer must at all times consist of (2)

Answer 4

• a sufficient number of non-executive directors and independent directors to promote objectivity in decision making by the board of directors
• an appropriate number and mix of individuals to ensure that there is an adequate
• – overall spread and level of knowledge,
• – expert skills and experience at board level,
• – commensurate with the nature, scale and complexity of the business and the risks of the insurer